Estate Planning For Retirement

Before a person retires, he or she will have to give some thought to estate planning. There are multiple things that a person or couple must do to get ready for the golden years. Why they are called "golden" is anyone's guess, as this can be a challenging time financially without a strong plan and an ample savings account. Some of the components of a good plan include where a person will live, where their income will come from, and legal documents such as wills, directives and powers-of-attorney.

Where to Live

In an ideal world, retirees would have a place to live that is mortgage-free or rent-free. That's right. If a home has been paid off prior to retirement, this will get rid of a substantial monthly expense, leaving more money for living and traveling. The goal to paying off a mortgage before leaving the working world is a good one. Having no debt at all is even better.

Source of Income

In yesteryear, everyone had a pension plan provided by employers. Those days are long gone. A few individuals may still have a pension if they are lucky. But even people who paid into their pensions over the years have found themselves out of luck as their employers' fund went belly up. Instead of relying on employers, up and coming retirees should have a nest egg and their own retirement accounts accumulating. Social security is another source that many count on for future income but even this government fund has become doubtful. If it remains in existence, the age that retirees can start collecting it will be later. Lots of older individuals will be working until they die. Some may welcome this idea as not having a function can lead to depression. Others aren't thrilled about it, but realize it's a reality. Having a variety of skills will make these elderly workers more marketable. Many employers like older employees because they are reliable.

Legal Documents to Get in Order

It will be necessary to have an attorney draw up some legal estate planning documents in preparation for these later years of life. Some of these docs include the following:

A will: Wills notate multiple items, such as who will be the executor of an estate, what assets there are and who will inherit them. If there are dependents, instructions for their care and support should be listed.

Directives: Medical directives are legal documents that give a specified individual the power to make decisions regarding medical care should a person become incapacitated mentally or physically. The named individual can make decisions about doctors, hospitals, treatments and more.

Power-of-attorney: Giving someone power-of-attorney will allow him or her to make legal decisions and sign documents for you. This may be temporary or considered permanent until it's revoked.

Before retiring, individuals and couples must do some estate planning in order to be ready for their golden years. This includes planning for housing, income and getting all legal paperwork set up by an attorney.